Change is only constant, and nowhere is this truer than in the political landscape of Nigeria. As subsidies become history, small and medium-sized enterprises (SMEs) in Nigeria face a new reality. In this blog, we’ll explore actionable strategies to not just survive but thrive in this ever-evolving political era.
What is post-subsidy all about?
“Post-subsidy removal” – a period following the discontinuation or removal of government subsidies on certain goods or services. Subsidies are financial incentives provided by governments to reduce the cost of specific products or services for consumers. These subsidies are often implemented to promote affordability, support certain industries, or stimulate economic growth.
In the context of Nigeria, for example, the government has historically subsidized fuel, keeping gasoline and diesel prices lower than they would be in a completely market-driven scenario. When a government decides to remove these subsidies, it typically results in higher prices for the subsidized goods or services, as the full market cost is passed on to consumers. Let’s talk about the actionable tips.
1: Adaptability
Adaptability is the currency of success in a post-subsidy Nigeria. SMEs can embrace this by diversifying their offerings, thereby expanding their product or service, and protecting the business from economic fluctuations. For example: In Nigeria, if you own a fashion boutique, explore the addition of accessories or complementary fashion items to your inventory. During economic downturns, consumers may prioritize affordable accessories, allowing you to maintain revenue even when clothing sales dip.
2: Protecting Your Business
Protecting your small business in Nigeria means taking proactive measures to safeguard your enterprise from challenges that can impact its operations, financial stability, and long-term viability. Key aspects to look into are
- Rigorous Budgeting: Create a realistic budget that accounts for rising costs and potential economic uncertainties. Your budget should serve as a roadmap to navigate financial challenges.
- Emergency Fund: Set aside finances for unforeseen emergencies or dips in revenue. Think of it as a financial rainy-day fund.
3: Operational Efficiency
As a business owner, audit your expenses and identify areas where you can trim without compromising the quality or service of your business. Check your supply chain and negotiate better deals with suppliers.
You can also invest in technology to automate repetitive tasks, reduce human error, and improve efficiency. This might involve upgrading your point-of-sale system and adopting cloud-based solutions. cloud-based bookkeeping and accounting solutions. For instance, if you have a retail store, consider implementing a website or mobile app to reach customers who prefer online shopping, especially during times when physical store visits are limited.
4: Marketing and Branding
As Nigeria undergoes economic shifts and market dynamics change, the role of branding becomes even more important for small businesses. One powerful tool at your disposal is rebranding. Rebranding allows you to align your business with current market trends and customer expectations. If you own a fashion boutique, rebranding could involve updating your store’s interior design, refreshing your logo, and adopting a more contemporary and fashion-forward visual identity to attract younger customers.
Rebranding helps your business stay relevant, reach new audiences, differentiate your business, reposition your business, address negative perceptions and boost employee morale.
5: Compliance and Regulation
The political landscape can bring forth new regulations. Keep a close eye on changes in regulations and tax policies. Establish relationships with legal experts who can guide you through this compliance. Also, advocate for policies that benefit SMEs and participate in relevant industry associations. For example: Registering your business with the Corporate Affairs Commission (CAC) and obtaining the necessary licenses and permits are fundamental steps in establishing your legal business presence in Nigeria. Click HERE to read more and register your business.
As subsidies fade into history, SMEs in Nigeria must embrace change, and adaptability and stay vigilant for market shifts. Be ready to adjust your strategies to meet changing customer demands or economic circumstances.
Post-subsidy Nigeria may present challenges, but with the right strategies and mindset, SMEs can emerge stronger and more prosperous than ever before. Here’s to your success in the new political era!